Finance Minister Yair Lapid (Yesh Atid) on Saturday night temporarily suspended all monetary transfers to regional and local councils in Judea and Samaria that govern the day-to-day life of West Bank settlements.

He made the decision after a report on Channel 2 accused the councils of inappropriately transferring funds to the political arm of the settlement movement the Council of Jewish Communities of Judea and Samaria.

According to Channel 2, those funds were taken from a sum of NIS 148 million that the Finance Ministry had transferred to the local and regional settler councils to compensate them for financial losses incurred during the 10-month moratorium on new housing starts that began in November 2009 and ended in September 2010.

The lack of new building meant that the local settler councils did not receive anticipated funding that they would have collected from fees associated with those projects.

According to Channel 2, the settlements received compensation funds annually since 2010, including last year.

Channel 2 did not state exactly how much of that sum was handed over to the council. But it referenced the protocols of a 2011 meeting of the Efrat Council obtained by the organization Molad, the Center for the Renewal of Israeli Democracy. Those protocols spoke of an 80 percent transfer of funds to the Council of Jewish Communities. Molad reiterated this figure in a separate statement that it released to the press.

Channel 2 said the money was used by the council to advance its political agenda, which is opposed to that of the government.

Molad’s statement noted that in 2011, Economy Minister Naftali Bennett (Bayit Yehudi) was the director-general of the council.

Lapid’s office said that the funds had been earmarked for security, school maintenance, and kindergartens, and not for the settlers’ political council.

It explained that Lapid had asked his budget director and his office’s legal adviser to investigate the matter and issue a report on the matter within a week. It noted that the compensation funds had been authorized by former finance minister Yuval Steinitz. Justice Minister Tzipi Livni said she also plans to investigate the matter.

Council deputy head Yigal Delmonit said that left-wing organizations in the past had tried to halt the transfer of funding from the local settler governments to his organization, particularly during the battle against the Gaza withdrawal.

The matter reached the High Court of Justice, which in response to a Peace Now 2006 petition ruled that local governments in Judea and Samaria could transfer funding to his council.

He said that his council’s budget is NIS 12m. a year, including funding for public relations campaigns on behalf of the settlements. He charged that the Molad report was part of a renewed campaign by the Left to harm the council.

Peace Now Executive Director Yariv Oppenheimer clarified that the 2006 HCJ ruling stated that
only funds from the local property tax could be transferred to the Council of Jewish Communities of Judea and Samaria.

A Finance Ministry source clarified that the issue here was that funding earmarked for one purpose that had been used for another.

MK Stav Shaffir attacked Bennett for his past involvement in the issue, charging that he took tax funds that could have gone to help disadvantaged Israelis and instead siphoned them off to advance a narrow right-wing political agenda.